TMI Blog2016 (10) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... d as income from other sources - Decided in favour of the assessee - I.T.A. No. 3513/DEL/2013 - - - Dated:- 5-10-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER Assessee by : Sh. Ved Jain, Adv., Sh. Ashish Chadha, CA Department by : Sh. IPS Bindra, CIT(DR) ORDER PER H.S. SIDHU : JM This Appeal filed by the Assessee is directed against the Order dated 4.3.2013 passed by the Ld. Commissioner of Income Tax(Appeal-III), New Delhi relevant for the assessment year 2009-10. 2. The grounds raised in the Appeal read as under:- 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (-) 32,167/- was filed on 29.9.2009. A search u/s. 132 was conducted in this case on 25.9.2008. Accordingly, the case was taken up for scrutiny. Statutory notices were issued and duly complied with. In response to the notices assessee s AR filed the various details. Thereafter, the AO made the addition of ₹ 12,15,015/-. The reasons for making addition arose from the fact that during the assessment proceeding the AO found that the assessee had a deposit in the shape of FDR with the Indusind Bank on which during the year the assessee has earned interest of ₹ 12,15,015/-. AO observed that since the said interest was not shown as income under the head income from other sources instead the same was adjusted from the cost of work- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such deposits is incidental to the acquisition of assets and accordingly, capitalized. In the present case also it was obligatory to provide the bank guarantee for which fixed deposit has been made by the assessee to commence its business. Therefore, the interest income earned is nothing but the business income of the assessee and the act of assessee to reduce work in progress to the extent of interest received and Ld. CIT(A) for the assessment years mentioned above deleted the similar additions made by the AO in assessee s own case. Ld. Counsel for the assessee also filed the copies of the order dated 23.9.2015 passed by the Ld. CIT(A) in assessee s own case for the assessment years 2010-11 and 2011-12 as well as the copy of the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity depended upon certain conditions. Thus, it is clearly evincible that the bank guarantee was furnished as a condition precedent to entering into the contract and further it was to be kept alive to fulfill the obligations. Quite apart from the above, the release of the same was dependent on the satisfaction of certain conditions. Thus, the instant case is not one where the assessee had made the deposit of surplus money lying idle with it in order to earn interest; on the contrary, the amount of interest was earned from fixed deposits which were kept in the bank for furnishing the bank guarantee. It had an inextricable nexus with securing the contract. Accordingly, the view expressed by the Tribunal cannot be found fault with. [Para 21] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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